International Business: Competing in the Global Marketplace 12e

Cover
Title Page
Copyright Page
Dedication
About the Authors
Brief Contents
Contents
Acknowledgments
part one Introduction and Overview
CHAPTER 1 Globalization
Opening Case Globalization of BMW, Rolls-Royce, and the MINI
Introduction
What Is Globalization?
The Globalization of Markets
The Globalization of Production
Management Focus Boeing’s Global Production System
The Emergence of Global Institutions
Drivers of Globalization
Declining Trade and Investment Barriers
Role of Technological Change
The Changing Demographics of the Global Economy
The Changing World Output and World Trade Picture
The Changing Foreign Direct Investment Picture
Country Focus India’s Software Sector
The Changing Nature of the Multinational Enterprise
Management Focus Wanda Group
The Changing World Order
Global Economy of the Twenty-First Century
The Globalization Debate
Antiglobalization Protests
Globalization, Jobs, and Income
Country Focus Protesting Globalization in France
Globalization, Labor Policies, and the Environment
Globalization and National Sovereignty
Globalization and the World’s Poor
Managing in the Global Marketplace
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Uber: Going Global from Day One
Endnotes
part two National Differences
CHAPTER 2 National Differences in Political, Economic, and Legal Systems
Opening Case The Decline of Zimbabwe
Introduction
Political Systems
Collectivism and Individualism
Democracy and Totalitarianism
Country Focus Putin’s Russia
Economic Systems
Market Economy
Command Economy
Mixed Economy
Legal Systems
Different Legal Systems
Differences in Contract Law
Property Rights and Corruption
Country Focus Corruption in Brazil
Management Focus Did Walmart Violate the Foreign Corrupt Practices Act?
The Protection of Intellectual Property
Management Focus Starbucks Wins Key Trademark Case in China
Product Safety and Product Liability
Focus on Managerial Implications: The Macro Environment Influences Market Attractiveness
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Economic Transformation in Vietnam
Endnotes
CHAPTER 3 National Differences in Economic Development
Opening Case Economic Development in Bangladesh
Introduction
Differences in Economic Development
Map 3.1 GNI per capita, 2016
Map 3.2 GNI PPP per capita, 2016
Map 3.3 Average annual growth rate in GDP (%), 2007–2016
Broader Conceptions of Development: Amartya Sen
Map 3.4 Human Development Index, 2015
Political Economy and Economic Progress
Innovation and Entrepreneurship Are the Engines of Growth
Innovation and Entrepreneurship Require a Market Economy
Innovation and Entrepreneurship Require Strong Property Rights
The Required Political System
Country Focus Emerging Property Rights in China
Economic Progress Begets Democracy
Geography, Education, and Economic Development
States in Transition
The Spread of Democracy
Map 3.5 Freedom in the world, 2017
The New World Order and Global Terrorism
The Spread of Market-Based Systems
Map 3.6 Index of economic freedom, 2017
The Nature of Economic Transformation
Deregulation
Privatization
Country Focus India’s Economic Transformation
Legal Systems
Implications of Changing Political Economy
Focus on Managerial Implications: Benefits, Costs, Risks, and Overall Attractiveness of Doing Business Internationally
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case The Political and Economic Evolution of Indonesia
Endnotes
CHAPTER 4 Differences in Culture
Opening Case The Swatch Group and Cultural Uniqueness
Introduction
What Is Culture?
Values and Norms
Culture, Society, and the Nation-State
Determinants of Culture
Social Structure
Individuals and Groups
Social Stratification
Country Focus India and Its Caste System
Religious and Ethical Systems
Map 4.1 World Religions
Christianity
Islam
Country Focus Secularism in Turkey
Hinduism
Buddhism
Confusianism
Management Focus China and Its Guanxi
Language
Spoken Language
Unspoken Language
Education
Culture and Business
Cultural Change
Focus on Managerial Implications: Cultural Literacy and Competitive Advantage
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case The Emirates Group and Employee Diversity
Endnotes
CHAPTER 5 Ethics, Corporate Social Responsibility, and Sustainability
Opening Case Woolworths Group’s Corporate Responsibility Strategy 2020
Introduction
Ethics and International Business
Employment Practices
Management Focus “Emissionsgate” at Volkswagen
Human Rights
Environmental Pollution
Corruption
Ethical Dilemmas
Roots of Unethical Behavior
Personal Ethics
Decision-Making Processes
Organizational Culture
Unrealistic Performance Goals
Leadership
Societal Culture
Philosophical Approaches to Ethics
Straw Men
Utilitarian and Kantian Ethics
Rights Theories
Justice Theories
Focus on Managerial Implications: Making Ethical Decisions Internationally
Management Focus Corporate Social Responsibility at Stora Enso
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case UNCTAD Sustainable Development Goals
Endnotes
part three The Global Trade and Investment Environment
CHAPTER 6 International Trade Theory
Opening Case Donald Trump on Trade
Introduction
An Overview of Trade Theory
The Benefits of Trade
The Pattern of International Trade
Trade Theory and Government Policy
Mercantilism
Country Focus Is China Manipulating Its Currency in Pursuit of a Neo-Mercantilist Policy?
Absolute Advantage
Comparative Advantage
The Gains from Trade
Qualifications and Assumptions
Extensions of the Ricardian Model
Country Focus Moving U.S. White-Collar Jobs Offshore
Heckscher–Ohlin Theory
The Leontief Paradox
The Product Life-Cycle Theory
Product Life-Cycle Theory in the Twenty-First Century
New Trade Theory
Increasing Product Variety and Reducing Costs
Economies of Scale, First-Mover Advantages, and the Pattern of Trade
Implications of New Trade Theory
National Competitive Advantage: Porter’s Diamond
Factor Endowments
Demand Conditions
Related and Supporting Industries
Firm Strategy, Structure, and Rivalry
Evaluating Porter’s Theory
Focus on Managerial Implications: Location, First-Mover Advantages, and Government Policy
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case The Trans Pacific Partnership (TPP)
Appendix International Trade and the Balance of Payments
Endnotes
CHAPTER 7 Government Policy and International Trade
Opening Case Boeing and Airbus Are in a Dogfight over Illegal Subsidies
Introduction
Instruments of Trade Policy
Tariffs
Subsidies
Country Focus Are the Chinese Illegally Subsidizing Auto Exports?
Import Quotas and Voluntary Export Restraints
Export Tariffs and Bans
Local Content Requirements
Administrative Policies
Antidumping Policies
The Case for Government Intervention
Management Focus Protecting U.S. Magnesium
Political Arguments for Intervention
Economic Arguments for Intervention
The Revised Case for Free Trade
Retaliation and Trade War
Domestic Policies
Development of the World Trading System
From Smith to the Great Depression
1947–1979: GATT, Trade Liberalization, and Economic Growth
1980–1993: Protectionist Trends
The Uruguay Round and the World Trade Organization
WTO: Experience to Date
The Future of the WTO: Unresolved Issues and the Doha Round
Country Focus Estimating the Gains from Trade for America
Multilateral and Bilateral Trade Agreements
The World Trading System under Threat
Focus on Managerial Implications: Trade Barriers, Firm Strategy, and Policy Implications
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Is China Dumping Excess Steel Production?
Endnotes
CHAPTER 8 Foreign Direct Investment
Opening Case Foreign Direct Investment in Retailing in India
Introduction
Foreign Direct Investment in the World Economy
Trends in FDI
The Direction of FDI
The Source of FDI
Country Focus Foreign Direct Investment in China
The Form of FDI: Acquisitions versus Greenfield Investments
Theories of Foreign Direct Investment
Why Foreign Direct Investment?
Management Focus Foreign Direct Investment by Cemex
The Pattern of Foreign Direct Investment
The Eclectic Paradigm
Political Ideology and Foreign Direct Investment
The Radical View
The Free Market View
Pragmatic Nationalism
Shifting Ideology
Benefits and Costs of FDI
Host-Country Benefits
Host-Country Costs
Home-Country Benefits
Home-Country Costs
International Trade Theory and FDI
Government Policy Instruments and FDI
Home-Country Policies
Host-Country Policies
International Institutions and the Liberalization of FDI
Focus on Managerial Implications: FDI and Government Policy
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Burberry Shifts Its Strategy in Japan
Endnotes
CHAPTER 9 Regional Economic Integration
Opening Case Renegotiating NAFTA
Introduction
Levels of Economic Integration
The Case for Regional Integration
The Economic Case for Integration
The Political Case for Integration
Impediments to Integration
The Case against Regional Integration
Regional Economic Integration in Europe
Evolution of the European Union
Map 9.1 Member states of the European Union in 2017
Political Structure of the European Union
Management Focus The European Commission and Intel
The Single European Act
The Establishment of the Euro
Country Focus The Greek Sovereign Debt Crisis
Enlargement of the European Union
British Exit from the European Union (BREXIT)
Regional Economic Integration in the Americas
Map 9.2 Economic integration in the Americas
The North American Free Trade Agreement
The Andean Community
Mercosur
Central American Common Market, CAFTA, and CARICOM
Regional Economic Integration Elsewhere
Association of Southeast Asian Nations
Map 9.3 ASEAN countries
Regional Trade Blocs in Africa
Other Trade Agreements
Focus on Managerial Implications: Regional Economic Integration Threats
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case The Push toward Free Trade in Africa
Endnotes
part four The Global Monetary System
CHAPTER 10 The Foreign Exchange Market
Opening Case The Mexican Peso, the Japanese Yen, and Pokemon Go
Introduction
The Functions of the Foreign Exchange Market
Currency Conversion
Insuring against Foreign Exchange Risk
Management Focus Embraer and the Gyrations of the Brazilian Real
The Nature of the Foreign Exchange Market
Economic Theories of Exchange Rate Determination
Prices and Exchange Rates
Country Focus Quantitative Easing, Inflation, and the Value of the U.S. Dollar
Interest Rates and Exchange Rates
Investor Psychology and Bandwagon Effects
Summary of Exchange Rate Theories
Exchange Rate Forecasting
The Efficient Market School
The Inefficient Market School
Approaches to Forecasting
Currency Convertibility
Focus on Managerial Implications: Foreign Exchange Rate Risk
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Apple’s Earnings Hit by Strong Dollar
Endnotes
CHAPTER 11 The International Monetary System
Opening Case Egypt and the IMF
Introduction
The Gold Standard
Mechanics of the Gold Standard
Strength of the Gold Standard
The Period between the Wars: 1918–1939
The Bretton Woods System
The Role of the IMF
The Role of the World Bank
The Collapse of the Fixed Exchange Rate System
The Floating Exchange Rate Regime
The Jamaica Agreement
Exchange Rates since 1973
Country Focus The U.S. Dollar, Oil Prices, and Recycling Petrodollars
Fixed versus Floating Exchange Rates
The Case for Floating Exchange Rates
The Case for Fixed Exchange Rates
Who Is Right?
Exchange Rate Regimes in Practice
Pegged Exchange Rates
Currency Boards
Crisis Management by the IMF
Financial Crises in the Post–Bretton Woods Era
Country Focus The IMF and Iceland’s Economic Recovery
Evaluating the IMF’s Policy Prescriptions
Focus on Managerial Implications: Currency Management, Business Strategy, and Government Relations
Management Focus Airbus and the Euro
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case China’s Exchange Rate Regime
Endnotes
CHAPTER 12 The Global Capital Market
Opening Case Saudi Aramco
Introduction
Benefits of the Global Capital Market
Functions of a Generic Capital Market
Attractions of the Global Capital Market
Management Focus The Industrial and Commercial Bank of China Taps the Global Capital Market
Growth of the Global Capital Market
Global Capital Market Risks
Country Focus Did the Global Capital Markets Fail Mexico?
The Eurocurrency Market
Genesis and Growth of the Market
Attractions of the Eurocurrency Market
Drawbacks of the Eurocurrency Market
The Global Bond Market
Attractions of the Eurobond Market
The Global Equity Market
Foreign Exchange Risk and the Cost of Capital
Focus on Managerial Implications: Growth of the Global Capital Market
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Alibaba’s Record-Setting IPO
Endnotes
part five The Strategy and Structure of International Business
CHAPTER 13 The Strategy of International Business
Opening Case Sony’s Global Strategy
Introduction
Strategy and the Firm
Value Creation
Strategic Positioning
The Firm as a Value Chain
Global Expansion, Profitability, and Profit Growth
Expanding the Market: Leveraging Products and Competencies
Location Economies
Experience Effects
Leveraging Subsidiary Skills
Profitability and Profit Growth Summary
Management Focus Leveraging Skills Worldwide at ArcelorMittal
Cost Pressures and Pressures for Local Responsiveness
Pressures for Cost Reductions
Pressures for Local Responsiveness
Management Focus Viacom International Media Networks
Choosing a Strategy
Global Standardization Strategy
Localization Strategy
Transnational Strategy
International Strategy
Management Focus Evolution of Strategy at Procter & Gamble
The Evolution of Strategy
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case IKEA’s Global Strategy
Endnotes
CHAPTER 14 The Organization of International Business
Opening Case Unilever’s Global Organization
Introduction
Organizational Architecture
Organizational Structure
Vertical Differentiation: Centralization and Decentralization
Management Focus Walmart International
Horizontal Differentiation: The Design of Structure
Integrating Mechanisms
Management Focus Dow—(Failed) Early Global Matrix Adopter
Control Systems and Incentives
Types of Control Systems
Incentive Systems
Control Systems, Incentives, and Strategy in the International Business
Processes
Organizational Culture
Creating and Maintaining Organizational Culture
Organizational Culture and Performance in the International Business
Management Focus Lincoln Electric and Culture
Synthesis: Strategy and Architecture
Localization Strategy
International Strategy
Global Standardization Strategy
Transnational Strategy
Environment, Strategy, Architecture, and Performance
Organizational Change
Organizational Inertia
Implementing Organizational Change
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Organizational Architecture at P&G
Endnotes
CHAPTER 15 Entry Strategy and Strategic Alliances
Opening Case Gazprom and Global Strategic Alliances
Introduction
Basic Entry Decisions
Which Foreign Markets?
Management Focus Tesco’s International Growth Strategy
Timing of Entry
Scale of Entry and Strategic Commitments
Market Entry Summary
Management Focus The Jollibee Phenomenon
Entry Modes
Exporting
Turnkey Projects
Licensing
Franchising
Joint Ventures
Wholly Owned Subsidiaries
Selecting an Entry Mode
Core Competencies and Entry Mode
Pressures for Cost Reductions and Entry Mode
Greenfield Venture or Acquisition?
Pros and Cons of Acquisitions
Pros and Cons of Greenfield Ventures
Which Choice?
Strategic Alliances
Advantages of Strategic Alliances
Disadvantages of Strategic Alliances
Making Alliances Work
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Starbucks’ Foreign Entry Strategy
Endnotes
part six International Business Functions
CHAPTER 16 Exporting, Importing, and Countertrade
Opening Case Tata Motors and Exporting
Introduction
The Promise and Pitfalls of Exporting
Management Focus Ambient Technologies and the Panama Canal
Improving Export Performance
International Comparisons
Information Sources
Management Focus Exporting with Government Assistance
Service Providers
Export Strategy
Management Focus 3M’s Export Strategy
The globalEDGE™ Exporting Tool
Export and Import Financing
Lack of Trust
Letter of Credit
Draft
Bill of Lading
A Typical International Trade Transaction
Export Assistance
Export-Import Bank
Export Credit Insurance
Countertrade
The Popularity of Countertrade
Types of Countertrade
Pros and Cons of Countertrade
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Embraer and Brazilian Importing
Endnotes
CHAPTER 17 Global Production and Supply Chain Management
Opening Case Alibaba and Global Supply Chains
Introduction
Strategy, Production, and Supply Chain Management
Where to Produce
Country Factors
Management Focus IKEA Production in China
Technological Factors
Production Factors
The Hidden Costs of Foreign Locations
Management Focus H&M and Its Order Timing
Make-or-Buy Decisions
Global Supply Chain Functions
Global Logistics
Global Purchasing
Managing a Global Supply Chain
Role of Just-in-Time Inventory
Role of Information Technology
Coordination in Global Supply Chains
Interorganizational Relationships
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Amazon’s Global Supply Chains
Endnotes
CHAPTER 18 Global Marketing and R&D
Opening Case ACSI and Satisfying Global Customers
Introduction
Globalization of Markets and Brands
Market Segmentation
Management Focus Marketing to Afro-Brazilians
Product Attributes
Cultural Differences
Economic Development
Product and Technical Standards
Distribution Strategy
Differences between Countries
Choosing a Distribution Strategy
Communication Strategy
Barriers to International Communication
Push versus Pull Strategies
Management Focus Unilever among India’s Poor
Global Advertising
Pricing Strategy
Price Discrimination
Strategic Pricing
Regulatory Influences on Prices
Configuring the Marketing Mix
International Market Research
Product Development
The Location of R&D
Integrating R&D, Marketing, and Production
Cross-Functional Teams
Building Global R&D Capabilities
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Global Branding, Marvel Studios, and Walt Disney Company
Endnotes
CHAPTER 19 Global Human Resource Management
Opening Case Building a Global Diverse Workforce at Sodexo
Introduction
Strategic Role of Global HRM: Managing a Global Workforce
Staffing Policy
Types of Staffing Policies
Expatriate Managers
Management Focus Expatriates at Royal Dutch Shell
Global Mindset
Training and Management Development
Training for Expatriate Managers
Repatriation of Expatriates
Management Focus Monsanto’s Repatriation Program
Management Development and Strategy
Performance Appraisal
Performance Appraisal Problems
Guidelines for Performance Appraisal
Compensation
National Differences in Compensation
Management Focus McDonald’s Global Compensation Practices
Expatriate Pay
Building a Diverse Global Workforce
International Labor Relations
The Concerns of Organized Labor
The Strategy of Organized Labor
Approaches to Labor Relations
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case AstraZeneca
Endnotes
CHAPTER 20 Accounting and Finance in the International Business
Opening Case Shoprite—Financial Success of a Food Retailer in Africa
Introduction
National Differences in Accounting Standards
International Accounting Standards
Management Focus Chinese Accounting
Accounting Aspects of Control Systems
Exchange Rate Changes and Control Systems
Transfer Pricing and Control Systems
Separation of Subsidiary and Manager Performance
Financial Management: The Investment Decision
Capital Budgeting
Project and Parent Cash Flows
Management Focus Black Sea Oil and Gas Ltd
Adjusting for Political and Economic Risk
Risk and Capital Budgeting
Financial Management: The Financing Decision
Financial Management: Global Money Management
Minimizing Cash Balances
Reducing Transaction Costs
Managing the Tax Burden
Moving Money across Borders
Chapter Summary
Critical Thinking and Discussion Questions
Research Task
Closing Case Tesla, Inc.—Subsidizing Tesla Automobiles Globally
Endnotes
part seven Integrative Cases
Global Medical Tourism
Venezuela under Hugo Chávez and Beyond
Political and Economic Reform in Myanmar
Will China Continue to Be a Growth Marketplace?
Lead in Toys and Drinking Water
Creating the World’s Biggest Free Trade Zone
Sugar Subsidies Drive Candy Makers Abroad
Volkswagen in Russia
The NAFTA Tomato Wars
Subaru’s Sales Boom Thanks to the Weaker Yen
The IMF and Ukraine’s Economic Crisis
The Global Financial Crisis and Its Aftermath: Declining Cross-Border Capital Flows
Ford’s Global Platform Strategy
Philips’ Global Restructuring
General Motors and Chinese Joint Ventures
Exporting Desserts by a Hispanic Entrepreneur
Apple: The Best Supply Chains in the World?
Domino’s Global Marketing
Siemens and Global Competitiveness
Microsoft and Its Foreign Cash Holdings
Glossary
Organization Index
Name Index
Subject Index
Copyright
Title Page
Dedication
Contents
Chapter 1: ‘I’m thinking’ – Oh, but are you?
Chapter 2: Renegade perception
Chapter 3: The Pushbacker sting
Chapter 4: ‘Covid’: The calculated catastrophe
Chapter 5: There is no ‘virus’
Chapter 6: Sequence of deceit
Chapter 7: War on your mind
Chapter 8: ‘Reframing’ insanity
Chapter 9: We must have it? So what is it?
Chapter 10: Human 2.0
Chapter 11: Who controls the Cult?
Chapter 12: Escaping Wetiko
Postscript
Appendix: Cowan-Kaufman-Morell Statement on Virus Isolation
Bibliography
Index